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this is "nightly business report" with tyler mathisen and susie gharib. >> the drama playing out in the mediterranean takes markets on a ride. worldwide the parliament in cyprus rejects a plan to tax its bank depositors. the euro falls to its lowest level since november. ben bernanke and the fed get down to business. what should we expect after its two-day meeting ends tomorrow? we'll ask former federal reserve governor randy crosser in. >> and what does the ceo of one of the world's iconic brands think of the economy and the american consumer? susie sits down with the top man at coca-cola. all that and more coming up right now on "nbr." good evening and welcome to our public television viewers. susie, once again, little cyprus making big economic noise today. >> you're right, tyler.
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actually a big win for citizens in cyprus. lawmakers rejected today an unpopular and unprecedented proposal to tax bank deposits. it was part of a larger eurozone bailout plan to rescue those banks and keep the nation solvent. the crucial vote came after a wave of protests, and as cypr t cypriots scrambled to withdraw cash from their atms. bertha coombs joins us with more on today's historic vote and what's ahead for cyprus? >> what's ahead is a very big question. the world was watching the tiny island nation again today, in a show of hands-on opposition, party members voted no on a tax and 10% of bank deposits, a condition set by eurozone officials to secure 10 billion euro bailout. many called it extortion. ruling party members abstained saying beyond saying no they need to find another plan. parliament's now adjourned until thursday as cypriot officials continue to appeal to the
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european unaelectoral bank, the ecb for new bailout terms. the government is hoping this defeat will give them leverage to negotiate new terms with the european union so when parliament meets again on thursday they might have a better plan to vote on. it's a high-stakes game of chicken with each side wondering who's going to blink first. or in this case, whether the banks will run out of money before a deal is reached. if the eu does not back down then savers in cyprus will have to shoulder some of the burden for the bailout loan. and that has savers around the world wondering whether their deposits are safe. in cyprus tonight, banks remain closed with no clear indication when they'll reopen. one analyst from jpmorgan tonight saying cyprus has chosen a hard road. global markets are wondering where it's going to end. >> bertha, thank you very much for that report. when those banks reopen it is going to be a very interesting and busy day. bertha coombs, thank you. that uncertainty in cyprus sent the u.s. stock markets on a meandering hike today. the major averages began the
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session higher, following more good news about the u.s. housing market. but the day-long struggle in cyprus to gather support for those controversial bailout terms turned stocks mostly to the downside for much of the day and sent the euro currency to a nearly four-month low against the u.s. dollar. in the end, the dow was age to eke out a gain of nearly four points and ended the session at 14456 and avoiding the first three-day losing streak of the year. the nasdaq ended lower by eight and the s&p 500 fell almost four points. meanwhile, in washington, the federal reserve kicked off its two-day policy meeting, likely on the agenda international risk that could affect the u.s. economy. presumably including cyprus. as well as the improving u.s. job market, and strong housing sector. and as we wait for fed officials to wrap up their meeting tomorrow, it's expected they will leave interest rates unchanged. joining us to talk more about the fed, randall krosner, former
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fed governor and now professor of economics at the university of chicago. i've not had the benefit of being in those meetings. you have, and i'm curious to know, do you think cyprus came up? if so, how? and how would the fed governors and members of the fomc handicap its possible effects on the u.s. economy? >> it certainly would have come up, i think, if some analogies with iceland from a number of years ago. even a smaller country, only 250,000 people, not a million people, but it was something that we focused on. we worried about and tried to think of what the implications are. here it's clear the europeans have made i think a terrible mistake in making this proposal. that potentially could undermine confidence, and that could have knock-on effects not only for the whole financial system in europe but potentially for the u.s. >> randy, one thing that everyone wants to know at this point is how healthy or unhealthy is the u.s. economy? how far off are we from full health? >> alas i think we're pretty far from full health.
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we've seen some green shoots in the spring. actually as we've seen in 2010 and 2011, with a little bit more job growth, a little bit more retail consumption. more stabilization of the housing market but we still have these big risks. the fiscal follies in the u.s. are not anywhere near conclusion. europe obviously is a risk that's still on the table. and i think there's still uncertainties about china. >> it does feel, randy, like we've seen this movie before. green shoots in the economy. trouble in europe, fiscal follies in the united states. what did it take to change the fed's view of where the economy is, and specifically change its view of buying bonds or the level of interest rates? >> i think we'd have to see some dramatic changes in europe in the fiscal situation in the u.s. to make them feel comfortable. but there's less of that extreme risk that's going to hit. also we'd have to see a lot more
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data that the recovery in, for example, the labor market, has really taken root. you saw the green shoots before, a few months of more than 200,000 private sector jobs being created. but then, things kind of wilted. and never really took root. and the fed had to do more. i think they're going to be really wary of pulling the punch bowl away too early. they're going to want to make sure that those green shoots are firmly rooted and can probably withstand the chicago winter. >> randy, you talk about looking at the data, there is so much data that you can examine. for you, and especially as a former fed governor, what's the most important piece of data? is it the job market? >> i think it's exactly what the has said in their criteria for what they're looking at, whether they're going to continue easing or not which is the unemployment situation and the labor market as well as the inflation situation. fortunately inflation seems to be very well contained. if anything it's going down rather than going up and inflation expectations are
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wellage cored. the unemployment rate seems to be slowly moving down but so lairly i've been characterizing things as being in a sideways slide for the past year. we need to make a lot more pro-gless before the fed is going to start taking away the spending. >> thank you very much for joining us. we appreciate you being with us. >> well, the health of the u.s. economy, and consumer spending are important issues for corporate america. >> when i met with the ceo of coca-cola earlier today i asked muhtar kent if he's seen changes in consumer spendi ining habits. >> i think there is a lot of challengeses, let's be sure, that unemployment is still very high. youth unemployment is high. but i do think that there's a belief in people that the worst is over. and that as -- there will be a -- more stability. and as we see also gas prices begin to moderate now and as we
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see, i think, housing beginning to pick up, i do believe that this coming summer is going to be from a consumer sentiment point of view, slightly better than last summer. >> so how is coke's business doing so far this year? are sales picking up compared to last we're? >> i can't say that. we're in a quiet period. but in terms of the last quarter that we announced, we had good results across the globe. >> are you feeling good enough about the u.s. economy and the business environment that you'll be adding jobs this year? >> we, without 35 billion dollar investment program across the world, in in five years, over 35 billion, that's adding jobs in the world. >> how about the u.s.? >> we have invested about $10 billion in the united states. and i think, you know, there's a lot of puts and takes. there's some jobs that are not
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there that used to be there and there's some more jobs in the sale and front end of our system that are here now that weren't there a few years ago. >> coca-cola is big in europe. and now with these new concerns about the eurozone's economy, and the financial system what impact is this going to have on coca-cola's operations? >> yes, europe is challenged. yes, the consumer confidence is very mixed in europe. yes the entrepreneurial spirit is down in europe. yes investment is down in europe. unemployment is high. but let's not forget europe is a very rich continent. there is fre amounts of disposable income in europe, and therefore the bright side is you're in one of the most richest geographies in the world, and can you generate consumer demand for your brands and product. >> muhtar, coca-cola does business in prablgtically every country in the world, but with
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this banking crisis going on in cyprus, are you rethinking where you keep your cash surpluses? are you shifting your deposits to countries where the banking system is more stable? what is capping in cyprus, or or what happened last year in europe didn't play too much into our strategy. it's not about one region because we operate in 207 countries, and we don't believe that if there was -- if there's an issue in a certain geography like cyprus it really has any impact on how we do business. >> i want to -- i want to get your thoughts on mayor bloomberg's campaign against sugary drinks and everybody's concerned about obesity. if there is some kind of ban put in effect, at some point, what impact would this have on coca-cola? >> i think what we should talk about much more than a regulation is what can we do together with local leaders like
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mayor bloomberg, who i had a lot of respect for, the future solution lies in creating golden triangles with business, government, and civil society to make real commitments, to make real innovation, to make real commitments for nutritional labeling, health and wellness programs, and raise the awareness about -- for the general public about what is at stake here. >> but, as consumers drink less soda, and water is now america's favorite drink, how are you preparing for that change? >> oh, well we have -- we provide choice. we have 3,000 products, 500 brands, all across the world, and we provide choices. >> muhtar, i want to congratulate you on coca-cola for getting this award tonight for promoting women into leadership positions at your company. so you've said it makes good business sense to empower women. tell us why. >> it makes good business sense inside the company to empower women because when you are a
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consumer products business like ours, where 75% of your shoppers are women, you need to connect better with those shoppers through women leaders, and having a really good balance between women leaders, equitable balance between women leadership, and, and, and diversity of women, and general diversity in your workforce. that's why it makes a lot of good business sense. >> the award coca-cola is receiving recognizes the company for helping female entrepreneurs start businesses all around the globe. tyler? >> as we said earlier, more good news today about housing. construction of new homes and apartments in february came in above estimates, up 0.8. that's the fastest pace of new construction in nearly five years. and that house iing growth coul continue. and coming up, we head down to florida to kick off our series on housing. spring buying season. tonight we're going to focus on the booming miami condo market
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and what's fueling the building and the buying. susie? >> coming up the report card on america's infrastructure. tonight the good, the bad and the price tag. but first here's a look at how international markets finished the day. and in a back and forth market three dow components touched new 52-week highs. that's where we begin our market focus tonight. honeywell, travelers and united technology all gained at the open before drifting down and then closed fractionally higher just as did the dow today. deals drove some stocks today. amerisource signed a deal with
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wall green. shares up 3.5%. separately walgreens reported better than expected earnings. they will not renew its contract with the drug whole saler cardinal health and that sent that stock down more than 8%. carnival cruise lines has canceled a dozen sailings, ten from texas to mexico, two in european waters, and that's to improve two ships' emergency power and safety systems. that's what the company said. the stock fell 2% to $33. year-to-date carnival is down more than 9%. well a downward dog kind of day for lulu lemon. shared tumbled as it pulled a batch of yoga pants from store shelves because thaiths too sheer. the issue will have a significant impact the company said and reduce sales by about 3% in the current quarter. the stock was downgraded to neutral from a buy. lulu lemon shares closed at $54 a share down almost 3%.
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solid earnings tonight from adobe systems after the bell its first quarter earnings and revenues topped analyst estimates. the software giant's business is benefitting from a jump in cloud based subscriptions. shares rose more than 5.5% in after hours and are up more than 14% year-to-date. well if you thinkou're not saving enough for your retirement, wait till you hear some of the numbers out today in a survey by the employee benefit research institute. sharon epperson joins us with the details. sharon, just how difficult is it to save for retirement? >> well, a lot of folks just don't even think about it and they don't plan for it and they're increasingly more worried about it. the ebri survey showed that 28% of folks say that they're not at all confident they're going to have enough money to retire ever, and now that is up from 10% in 2007. right before the financial crisis. so this is the highest level that they've ever seen in this survey for that level of no confidence, and that zero confidence vote. and more, those who say that
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they're very confident, that number is not that high, either. we're talking about only about 13% think that they're going to have enough money to retire. >> and a very large percentage of individuals have virtually nothing set aside. $25,000 or less, and a lot of them don't even have $1,000 set aside. >> well, that's a big problem, of course, when you're talking about nearly 60% of people not having that much saved. and when you talk about how much they're savings has fallen in terms of whether they're currently saving at all, only 57% are even saving at all right now and that's down from 65% in 2009. >> and a lot of the people that we talk to say they're really worried about their medical expenses. and not putting enough money aside for health care. >> that i think has paralyzed some people. nearly a third of folks don't think they're going to have enough for medical expenses in retirement and you have to think about the long-term care you may need as you age and over a third say they're not going to have enough for that. right now what's really worrying people is what they're facing right now. the jarngt, they're looking at their debt levels and they're not even saving enough for right
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now. more than half of the workers surveyed and more than half of the retirees surveyed have less than $2,000 saved in case something happens in the short-term. >> sounds like a lot of people are banking on social security to cover their lack of personal savings. >> exactly. >> are they confident about social security? >> they're looking at those numbers. they get those from the social security department knowing what they might get there but they're not planning out for their overall retirement picture and that may not be enough that won't be enough for them and the fact that nearly half of folks haven't sat down with their spouse or done it themselves to figure out what they need, that's the greatest hindrance. those who have have a better chance of reaching their retirement goals. >> thank you very much, sharon. we appreciate you being with us. >> my pleasure. >> the report from the ebri. the american society of civil engineers today gave the country's infrastructure a grade of d-plus. and that's the good news. last time the group rated america's physical plan in 2009 the final grade was an even lower "d." back then the asce said we needed to be spending 55% more
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than planned to build and refurbish our infrastructure. now the gap is smaller, 44%, but the total outlay to bring in infrastructure up to snuff is huge. to the afce it's $3.6 trillion through 2020. tonight we're joined by the afce's president in washington. greg, this sounds like bad news but it's better than it was. why did the grade rise even though just slightly from back in 2009? >> right. well what we found was that there were investments in infrastructure that actually caused the grade to rise. there were six areas, frankly, that improved, money was invested, which is what we've been saying. invested the money and the grade rose. now investing the money in infrastructure isn't just so we can get a higher grade. investing in pressure has an economic value, and quality of life value to this country. and in other reports that the american society of civil engineers has done, we've shown that putting an investment in america's infrastructure can
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provide us an additional gross domestic product, can prevent the loss of jobs, and can prevent the loss of household income. >> ten of the 16 categories that you cover in the report showed no improvement from 2009. but some did improve. let's look at a couple, including a solid waste treatment facilities, which now are graded a b-minus up from a c-plus. that was the highest grade of any of the 16. rail getting a c-plus. bridges a c-plus. what's going right there, and not so right in other areas? >> well, if you look at rail, for example, we noted that in the last five years, rail, in private investments, have spent $20 billion a year over the five years. and so that's caused rail to go up. they've made an investment in rail. whether that's an increasing freight ability, whether that's rebuilding tunnels or tracks. they've made an investment. if we look at solid waste, we've actually seen a big increase in recycling, such that in 2010, americans recycled 85 million
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tons of a 250 million tons of garbage that we produce each year. we're also seeing cradle-to-grave programs with electronics. and so our recycling efforts are up to 34%, where they were only 14.5% in 1980. >> a couple of areas showing no change included energy infrastructure, levies, and inland waterways. inland waterways getting a d-minus, barely above a failing grade. how, if you know, does the u.s. infrastructure compare with that of other countries? in some surveys, very poorly, i believe. >> well, what we do know is that our infrastructure is a part of our competitiveness in the world. if we want to be competitive we need to invest. we can look at things such as china investing some 9% in their infrastructure. europe investing 5% of their gdp in infrastructure. yet you look at the united states, and we're down around 2%. and that's about half of what we invested 50 years ago. >> what about bridges?
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where -- how -- you know, there have been major stories having to do with the safety of our bridges, that major collapse in minneapolis a few years ago, are they getting better or not? >> yes. they're actually getting better. they improved over our 2009 report card. again, reflecting an increase investment in bridges. we're seeing that around the nation as local leaders step up and start replacing bridges that need to be replaced. that do maintenance on bridges. but actually building new bridges to relieve congestion in america. >> very quickly, where does private investment come in in bridges and roads? is that a way to take some of the pressure off of strained public budgets? >> well, what we've looked at in our reporting in other studies is that private investment is a partner with public investment. and they all have a role to play in making sure they have enough investment in infrastructure. and it's again, as i mentioned with rail, private investment was primarily the funding for our rail system in america. so roads, we've had partnerships, around the united states where private investment has worked with the public
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official to provide that investment. >> afce's president, thank you very much. >> thank you. >> we'll be back in a moment. but let's take a quick look at how metals, energy and treasuries posted. spring starts tomorrow but you couldn't tell from the snow on the ground outside our headquarters. this week we want to take a look at the spring buying season in housing. the condo market went from boom to bust and now it is booming again. diana olick joins us from miami to tell us about the forces driving the market and why the story might have a better ending this time. diana? well, tyler, six years ago, this was supposed to be a 25 story condo building with hundreds of units. but like so many other bankrupt developments in the housing craft, it never got off the
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game. well, all right, i lied. maybe it got almost to the first floor. well now with a new owner, marina palm, plus the rest of the miami condo market is rising from the ashes, thanks to a huge influx of foreign buyers and developers are pulling out all the stops to lure them in. in the miami condo market -- >> i could have more people hanging from chandeliers, i certainly would. >> reporter: -- the circuit is back, with over the big top launch parties even before the condo has broken ground. miami heat sells, and it is translating itself to buyers from russia, venezuela, brazil, canada and china. >> it doesn't get any better. i travel all over the world. i really want to come back to miami. >> reporter: the buyers come armed with cash, and lots of it, looking for safe havens. >> buyers today are really expected to put 20% deposit, and then another 20% upon ground breaking, and another 20% upon
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topoff. what that does, it takes the leverage out of the flipper. >> and that helps developers get financing from both banks and private equities. the plaza group is developing two towers and a full service marina on a site where construction began and ended abruptly during the crash. >> they're going to scrutinize the buyer a great deal. they're going to scrutinize the developer's track record. they want people with experience. they want to know that you have hard deposits. >> south florida's coastal markets have 103 towers proposed with nearly 15,000 units. 40% of the developers themselves are from abroad. with all this new supply about to hit, now strong rents could take a plunge. condo vultures have worked this market for decades and worries about the developer's strategy. >> from everything we've seen over the last six years you and i have been here many times. this doesn't look crazy to you. >> you know, it's mind boggling. i'm perplexed as to how all this could go forward this quickly.
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you need to rush to market. you need to be first, so when it craps out, it will, you're not the guy stuck having to deal with the bank. >> now, rising with the cranes are the prices for condos. up 25% from a year ago according to the realtors here. now, the big question is, of course, the investors are getting great rents now. but with all this new supply coming on, and the rents would then come down, does that mean some of the new owners would decide to get out of the market? put them up for sale? and then, of course, we'd have yet another glut of miami condos. for "nightly business report" i'm diana olick in miami. tyler and susie? >> diana, so envious of you standing there. you know what's different this time, susie, is the keyword there, cash. how much of this building and of these purchases are being financed by foreigners who are coming in with loads of cash but also by hedge fund people and americans who are not taking on the leverage that they did the last time? >> really, i mean, i was wondering did they learn the
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lessons? or are we going to go through another boom/bust. >> he said i just want to get out of here before the next crash comes. >> let's hope it all works out, it will be good for the che. and that's "nightly business report" for tonight. i'm susie gharib, thanks so much for watching. >> and i'm tyler mathisen. thanks for joining us. we hope to see you right back here tomorrow night.
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Nightly Business Report
PBS March 19, 2013 6:30pm-7:00pm PDT

News/Business. Paul Krugman. (2013) CEO Mohamed el-Erian, PIMCO; columnist Paul Krugman. New. (CC) (Stereo)

TOPIC FREQUENCY Cyprus 14, U.s. 14, Europe 13, Us 7, America 7, United States 4, Miami 4, Tyler 4, Coca-cola 3, China 3, Tyler Mathisen 2, Diana Olick 2, Muhtar 2, Susie 2, Randy 2, Chicago 2, Washington 2, Adobe 1, United 1, Honeywell 1
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on 3/20/2013